Reinsurance and the sale of failed New Zealand insurer AMI’s investments and brand will cover $NZ1.9 billion ($1.58 billion) of the insurer’s $NZ2.2 billion ($1.82 billion) in earthquake claims – leaving the country’s Government with a $NZ300 million ($248.86 million) shortfall.

Christchurch-based AMI was forced to seek a government bailout in 2011 after it incurred huge liabilities from the Canterbury quakes.

The insurer was bought by IAG last year for $380 million, but the earthquake claims were split into a separate state-owned company, Southern Response.

In its first year, Southern Response has completed a third of its claims, Earthquake Recovery Minister Gerry Brownlee says.

The company is responsible for about a third of all major residential earthquake claims in Canterbury and aims to complete its final claim by December 2016.

Southern Response is handling 6786 claims for homes and 21,960 for properties with damage to driveways, paths, fences and pools.